Originally published 1:00 p.m., January 18, 2007Updated 11:39 a.m., March 1, 2007

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Cojo and Jalama Close Escrow

by Ethan Stewart

The news took its time solidifying. Rumors from the Gaviota
speculation from Montecito, and worst case scenarios from
everywhere in between eventually gave way to an official statement
issued on January 10: the historic, sprawling, and awe-inspiring
Jalama and Cojo ranches — collectively and popularly known as the
Bixby Ranch — had officially sold. Despite falling in and out of
escrow numerous times in recent months, all but chasing away any
would-be investor (including Donald Trump), the approximately
25,000 acres of coastal rangeland were finally purchased for $136
million by the East Coast investment firm Baupost Group. Sold by
local real estate company Kerry Morman and Associates — which
specializes in multimillion-dollar hunks of pristine California
land — Bixby contains 109 developable lots. But in the wake of
arguably the largest private land deal in the history of the
county, the new owners’ lawyer, Steve Amerikaner, said of his
clients, they “absolutely do not have any specific plans yet for
the land.”

Reactions to the monumental sale varied
throughout the county, with environmentalists simultaneously
bemoaning the likelihood of development and expressing hope that
the new owners would create land conservation easements and/or
public access in this currently restricted area. As Gaviota
Conservancy Director Mike Lunsford put it, “People who spend big
money like this usually can afford [and have incentive] to do stuff
that protects the environment. That is, if they are inclined to do
so.” And the Santa Barbara Land Trust’s Michael Feeney pointed to
last year’s sale and conservation easement deal involving the
Central Coast’s Hearst Ranch, saying, “Obviously there is a very
good conservation play there, but whatever is going to decide the
future of Bixby is bigger than the Land Trust … though we’d
certainly like to be a part of it.” Typically at odds with the
environmental community, 3rd District Supervisor Brooks
Firestone — who met briefly with the new owners before the deal
became official — seemed equally cautious. “I don’t know what to
say,” he said. “I have no idea what they’ve got planned, but I’m a
conservative guy, and I don’t like to see any ranch change hands,
especially a big one like this.”

The sale of the ranches, which have been operated as a cattle
ranch for the past century and are home to the Point Conception
lighthouse and countless Chumash cultural sites, was a tightly
guarded industry secret. Phone calls to Baupost were met with the
reply, “Company policy is not to comment on any investment.” While
Amerikaner admitted to knowing little about Baupost, he did comment
that the company has a “fair amount of real estate development
experience” and described the investors as “very careful and
methodical folks.” He added that the firm is committed to opening
local dialogue, assessing the property, and “figuring out what
works best” in terms of its development plans.

Similarly, Linda Miller — whose name appears on all the county
papers associated with the deal — said in the official press
release about the sale, “We appreciate the beauty of this land and
the resources it shelters … . We have no preconceived plans for the
property and believe that any future plan will only be possible
after extensive consultation with the public, community leaders,
elected officials, environmentalists, government officials, and
longtime local ranchers.” A native of Lake Arrowhead, Miller is the
head of Coastal Resources Management, the limited liability
corporation formed by Baupost solely to carry out the Bixby Ranch
purchase, and is a longtime associate of the Baupost firm.

The Baupost Group as a whole is a Boston-based investment firm
managed by the world-renowned investment and stock soothsayer Seth
Klarman. Since its inception in the early ’80s, Klarman — a Harvard
graduate — grew the group out of about $100 million in start-up
funds into an impressive $6 billion firm that earns its members an
average annual return of nearly 20 percent. Known by fellow
investors as a particularly shrewd and calculating man who takes
into account a wide range of risks before pulling the trigger on an
investment, Klarman is the author of a book that has achieved
legendary status among investors throughout the world. Although
it’s been out of print for several years, Margin of Safety
regularly fetches more than $1,000 on eBay. Speaking anonymously, a
Boston investor who has worked with Baupost said of the group,
“These guys are big-time. They don’t make mistakes, and they are
seldom denied.”

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